Lincoln pharmacy shuts down after 30 years

Wednesday

After serving Lincoln and nearby communities for 30 years, the owner and primary pharmacist at Stacy’s Family Pharmacy said Wednesday’s closing of his store was “kind of bittersweet.”

A steady stream of current and former customers stopped by the bright, cozy store at 709 Woodlawn Road to pick up medicine or thank Bruce Stacy, 69, for his dedication and personal service.

But Stacy couldn’t escape a tinge of bitterness over the fact that financial pressure — from increasingly stingy private insurance plans and reduced payments through the state’s 2018 reboot of Medicaid managed care — played a role in his decision to close at this time.

David Falk, a Maroa resident who owns more than a dozen downstate Sav-Mor pharmacies, said slashed payment rates controlled by Medicaid “pharmacy benefit managers” also played a role in the July 27 closure of his pharmacies in Mount Pulaski and the Macon County community of Mount Zion.

Falk said the pharmacies in Mount Pulaski and Mount Zion had opened in the past five years, and neither was performing well enough financially to continue. But he said sharp reductions in payments from Medicaid-covered customers, who represented about 30 percent of the total, probably hastened the two pharmacies’ closure by a year.

The closures left those towns with no pharmacies. Prescriptions for the hundreds of regular customers were transferred to Walgreens stores in Lincoln and Decatur, respectively.

Falk said the recent closures continue to prove that pharmacy benefit managers, or PBMs, which work for the state’s contracted “managed-care organizations,” need more regulation from state government to prevent unfair treatment of independent pharmacies.

“When you go from making $11 or $12 per prescription to zero, it changes the game,” he said.

Even though Medicaid represented less than 10 percent of Stacy’s business, he, too, favored legislation to promote “fair reimbursement” for independent pharmacies.

Otherwise, he said, “Other little towns are going to lose their independent pharmacy, and people will have to drive a longer distance to get service.”

The Springfield-based Illinois Pharmacists Association says many owners of the state’s more than 500 independent pharmacies and smaller chains are being paid less than the “acquisition cost,” or wholesale cost, of the medicines they dispense to Medicaid patients.

Garth Reynolds, executive director of the association, says pharmacies also have seen their per-prescription “dispensing fee” from Medicaid, a fee designed to cover professional services, drop from $5.50 for generics and $2.40 for name-brand drugs under the previous “fee-for-service” system to the current 45 cents per prescription.

Advocates for managed-care organizations and PBMs say the managers save states money in their Medicaid systems. But advocates for pharmacy owners say Illinois’ less-than-transparent managed-care contracts conceal what may be unfairly high profits by PBMs that are being earned at the expense of independent pharmacies.

And because at least one PBM, CVS Caremark, is owned by the huge chain that operates CVS pharmacies, independent pharmacies say Caremark’s rate cuts may be designed to put independents out of business.

“We’re seeing in other states the exact same problem,” said state Rep. Greg Harris, D-Chicago. “We’ve got something going on that’s against the public interest.”

Critics of PBMs, including some Illinois lawmakers, point to elected officials in the state of Ohio who have taken action to force disclosure of more details in PBM contracts and rein in PBM profits.

State Sen. Andy Manar, D-Bunker Hill, along with Harris and other Democrats in the General Assembly, have been critical of the Medicaid managed-care reboot by Gov. Bruce Rauner, a Republican. Manar said he wants to hold public hearings and pass legislation requiring more disclosure of pricing structures in managed-care contracts.

Manar said he plans to push one such proposal, an amended version of House Bill 3479, for passage in the veto session this year or the 2019 spring session.

The state may not be saving money in the long run by using PBMs, and Illinois may end up with higher Medicaid pharmacy costs with less competition and less access for patients in rural areas if more independent pharmacies close, Manar said.

More closures are inevitable under the status quo, Manar said.

He said he has been frustrated by officials in the Rauner administration “dragging their feet” to implement a program of $10 million in payments to “critical-access pharmacies.” Manar said he pushed to get the funding included in the state’s fiscal 2019 budget, which took effect July 1. Manar said he thought the program would be rolled out immediately.

Rauner aide Elizabeth Tomev and John Hoffman, spokesman for the Illinois Department of Healthcare and Family Services, didn’t respond to a request for comment on the recent pharmacy closures and Manar’s comments.

In May, when the governor was asked to respond to pharmacy owners' complaints about any harmful effects of the managed-care reboot, HealthChoice Illinois, Rauner spoke about the need for competition.

“The reality is what we’re trying to do is drive more competition, and sometimes businesses can be competitive in costs, and some businesses can’t,” Rauner said at a Springfield event honoring small businesses in the state.

Rauner also said at that time: “My concern is to make sure we have high-quality health care provided to our residents who need it and deserve it, and that we drive real value for taxpayers. It’s unfair to our taxpayers to subsidize businesses that are high-cost.”

Wednesday’s closure of Stacy’s Family Pharmacy leaves Lincoln with no independent pharmacies. The only pharmacies left in Lincoln are operated by CVS, Walgreens, Walmart and Kroger.

The Kroger pharmacy is closing Aug. 31 when the Kroger supermarket on the same site also closes. A Kroger spokesman previously said the company is closing the Lincoln Kroger because the supermarket was unprofitable. A Kroger spokesman couldn’t be reached Wednesday regarding the pharmacy.

The closing of Stacy's Family Pharmacy affected eight employees and thousands of patients. The Stacy's pharmacy patients' prescriptions were transferred to CVS in Lincoln.

The pharmacies in Mount Pulaski and Mount Zion had a total of eight employees and hundreds of patients.

Some of the employees at the three pharmacies have found new jobs or have new jobs lined up, the owners said.

State Rep. Tim Butler, R-Springfield, whose legislative district includes Lincoln, couldn’t be reached for comment.

Bill Brady of Bloomington, the leader of Republicans who are in the minority in the Illinois Senate, “believes the closing of Stacy’s Family Pharmacy is unfortunate, and he understands the issues small pharmacies are facing,” according to Brady’s press secretary, Jason Gerwig.

“The issue is complex, and he’s hopeful we can find a way to ensure small pharmacies have as equal an opportunity as larger ones,” Gerwig said.